OBAMA: You certainly don’t reform our education system by calling to close the Department of Education.

That’s not my idea of reform. That’s not my idea of change.

(END VIDEO CLIP)

MATTHEWS: And, by the way, both candidates were in Ohio today, another indication of how big a role that state once again will play on Election Day. We will look at the day on the campaign trail and the latest poll numbers in just a moment.

Also, beyond the horse race. Who’s thinking about the future this of country when you think about it? Which candidate is preparing us for the 21st century? Good question. I think it’s the question, about jobs, education, infrastructure, the whole thing. Who is going to get our kids ready and grandkids ready to compete with those countries out there ready to compete with us? The huge challenges that lie ahead, we are going to talk about which candidate is really facing up to them.

We have got two outspoken and highly opinionated members of Congress -

they’re the kind we like—who will debate that one.

And all about Sarah. The choice of Sarah Palin has electrified Republicans, obviously, and flummoxed Democrats, equally obviously. But what do we really know about her? Can she sustain her sudden popularity? Or will new information sink her candidacy, like so many other morning glories in politics, overnight stars who faded?

In the “Politics Fix,” we’re going to talk to two reporters who have been covering the election to give you the inside scoop on what the campaigns are really doing and thinking today.

And what did John McCain’s daughter say on “The Today Show” this morning that—about John McCain that he would have liked to have kept under wraps? Well, we are going to have that little sugarplum for you, if you missed it morning, on the HARDBALL “Sideshow.” It is kind of neat, actually. I was staggered by it myself.

But we start with “The National Journal”‘s Ron Brownstein and CNBC’s chief Washington correspondent, John Harwood, who writes for “The New York Times.”

Gentlemen, we’re about two weeks coming up before the first big debate. I was looking at the numbers the other day, by the way. And everybody on this show loves numbers. Back in ‘60, when Kennedy and Nixon went at each other, they were even, 47 percent to 46 percent apart. Guess what? Guess who is 47 percent to 46 percent apart right now in the new ABC poll out today? Obama leads.

Isn’t that interesting, exactly the same number Nixon led by right before that big debate, 47-46. He had been had up by six.

Now let’s take a look at some other numbers. McCain now leads by two points in the CBS poll. By the way, just a couple weeks ago—or even a week ago—he was up by eight. That was 48-40. Now he’s down 46-44. That was a big pop-up in that debate—in that poll, if you believe it or not. The CBS poll shows rapid growth for John McCain.

And we have got the Pollster.com vote. Let’s take a look at that. That’s the average we get from the Pollster.com people. Just look at all the average. There it is, just about even, 46.6 percent to 46.2 percent.

I mean, this is the closest election we have ever seen, probably. And it may stay this close right to the end, which I guess we like here, right, Ron Brownstein?

RON BROWNSTEIN, “THE NATIONAL JOURNAL”: Well, look...

MATTHEWS: Do we like close elections?

BROWNSTEIN: We do like close elections. They tell us a lot about the country. The last two elections have divided the country almost exactly in half. For most of this year, this looked like it could be different.

All the trends, the underlying—in fact, still, the underlying structural dynamics in the electoral favor the Democrats. There was an opportunity there potentially for Democrats to open a wider lead, based on generics, based on presidential approval.

MATTHEWS: Right.

BROWNSTEIN: But we’re not. We’re moving back toward patterns very familiar to what we have seen in the last two elections, with each side consolidating its base, having a—an electorate that’s divided more by cultural than economic lines...

MATTHEWS: Gotcha.

BROWNSTEIN: ... and a limited number of battleground states. I mean, we have been on this ride before. Maybe these candidates can change it before the end, but, right now, it’s starting to look more similar than different to where we have been.

MATTHEWS: Do we have a—do we have a split personality, John Harwood? I mean, I’m thinking half the country wants to think about the 21st century, what we have to compete with, where you need to know about jobs and opportunities for our great kids and grandkids. And the other half of the country thinks like their parents and grandparents.

One part of us is, you know, high-tech. The other part is “Saturday Evening Post,” if you remember that particular journal.

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: Exactly.

And some of this is a matter of identity and some of it is a matter of economics. The thing that’s striking to me, following on Ron’s point, is that we are—we are seeing these cultural lines being drawn and reinforced by Sarah Palin.

And I will tell you what. If—if culture trumps the economy in an economy that we have got right now, that tells you something about how powerful it is, because people are so unhappy with the state of the economy. They have seen middle-income wages stagnate.

HARWOOD: And the idea that Barack Obama would have as much difficulty as he is driving that message of change on the economy tells you something about the power of those cultural identification issues.

BROWNSTEIN: Right.

MATTHEWS: You know, this country’s built, to a large extent, on people who came here because they wanted to take a chance, because they didn’t want to live the ways thing were in Europe, in many cases, or in Asia or in Africa, anywhere else they came from. They didn’t like the way things were going. They came here and things were better. Their hunch was right.

In every one of our major elections, going back to the ‘32 election, we have generally said, let’s take a chance on something new. Wouldn’t this be the first race, Ron, if we vote for McCain, where, better or worse, we’re not taking a chance on something new; we’re going to with something a lot more comfortable and more traditional, with Palin and McCain?

BROWNSTEIN: Well, I think ‘88 had elements of that, where George H.W. Bush maybe was a more familiar kind of prototype of a president than Michael Dukakis. But I think that you’re right.

I mean, look, by historical—another way of looking at this is when you have...

(CROSSTALK)

MATTHEWS: Are we losing our guts?

BROWNSTEIN: Well, basically...

MATTHEWS: You don’t want to answer that question, do you?

BROWNSTEIN: Yes. Well, no, when we have this legal of dissatisfaction with an outgoing president...

HARWOOD: Boy, I would have to think about that some more before I said it’s the first time.

MATTHEWS: Well, let me go through the change elections.

(CROSSTALK)

MATTHEWS: Let me go through the change elections.

(CROSSTALK)

HARWOOD: Chris, hold on a second.

(CROSSTALK)

MATTHEWS: OK.

(CROSSTALK)

MATTHEWS: Go do it your way.

HARWOOD: Let me just follow on the Reagan point, though. We took a chance on Reagan in 1980, but, when you talk to the Obama campaign, they see this race as having some similarities there, in sense that that race broke late.

So, it’s possible that we could have a verdict like that, but have a very close election through the fall, into the debates, before Barack Obama has the opportunity, with everybody tuning in, to lay him side by side with John McCain, and make a judgment that it’s OK to go there.

BROWNSTEIN: Can I just go to the point...

(CROSSTALK)

MATTHEWS: Sure.

BROWNSTEIN: I mean, the assumption of the Democrats all year has been that economic anxiety would drive this election and would move voters that had been culturally identified with the—culturally felt more comfortable with the Republicans toward them. They put a lot of focus in their convention about driving a line through the electorate by class, basically saying McCain was an economic elitist who didn’t get your life.

Well, look what happened. The Republicans came back with a very familiar argument, that the Democrats are cultural elitists who don’t respect your values. Palin obviously is the point of the spear on that.

And you see things like in the “Washington Post”/ABC poll today, or in our own poll “Hotline”/Diageo tracking poll...

MATTHEWS: Yes.

BROWNSTEIN: ... McCain is back up to 25-point advantage among white married women, many of whom are in fact economically stressed, but have been an important Republican voting bloc on cultural issues, and seem to be aligning there once again.

The Democrats are going to have to figure out if economics alone is an answer to the sort of cultural identification that the Republicans really aggressively laid down at their convention for the first time, I think, in John McCain’s political history, that you saw him trying to draw those kinds of lines in the electorate.

MATTHEWS: Let’s take a look at the latest. This is a little teaser of what we have got on the “Wall Street Journal” poll to give more—much more of at 7:00 tonight. Here’s a sneak preview of what we got.

The is an interesting poll. Twenty-four percent said the Biden pick makes them more likely to vote for—for Obama, 16 percent less. So, that’s a modest pickup. A much bigger pickup here for Palin, big—no big surprise here.

John Harwood, bigger bump, right, for picking her than picking him?

HARWOOD: Yes. She’s gotten a much more sensational sort of media ride than Joe Biden, and she has produced a bigger bump.

I think part of this is the effect that we have always anticipated in the past of Republicans perhaps getting more oomph out of a woman on the ticket than Democrats, because it plays against type. And what we have seen in the polling is that, among rural voters, among working—the working women, so-called Wal-Mart moms, and among some older men...

MATTHEWS: Yes.

HARWOOD: ... she is consolidating John McCain’s support.

I talked to strategists in Republican congressional races, who say, by the same token, in some of those Republican districts that have been shaky, they’re seeing those races firm up as well with Sarah Palin, because of the enthusiasm and juice she’s added to this ticket.

MATTHEWS: Do you think it’s possible that what we’re—what is appealing here—and I will be careful here—this is not about sexual relations—everybody, watch. This is not what I’m talking about.

When you see the picture together of John McCain, who is, you know, an older man, but he’s got an Audie Murphy kind of hero image, and this obviously attractive woman, much younger than him, it’s like they’re offering themselves up as kind of a political couple, almost like Clinton and Mrs. Clinton, Senator—or President Clinton and Mrs. Clinton.

They’re Offering themselves an interesting kind of—it’s a fascinating tableau. They’re hugging even—Elisabeth Bumiller on the front page of “The Times” today, when have we ever had running mates hug?

But what I find here is that. It’s such a fascinating—are they offering themselves up, Ron, as an alternative to Barack and Michelle Obama to go to the White House?

BROWNSTEIN: I don’t know. I...

(CROSSTALK)

MATTHEWS: And politically speaking. I know you’re going to hide from this. But I’m telling you, this picture is appealing to traditional Americans. They go, yes, that’s a nice traditional, formal—we have seen that picture before.

BROWNSTEIN: It’s an interesting thought, I mean, but I think the core of her...

MATTHEWS: The couple image.

BROWNSTEIN: ... appeal is—the core of her appeal is her kind of independent cultural identity, the way in which she is helping them connect with culturally conservative voters, especially women.

MATTHEWS: Have we seen a picture of Hillary—I have got to get the question out, because we’re losing it.

If Hillary had been put on the ticket, and she had campaigned swimmingly, like a couple, political couple, campaigned together, the way Barack—I mean, John McCain is campaigning with Governor—Governor Palin, as a happy political duo, a duet politically, if you will, would they be in stronger shape now, John? Do we have any way of looking at that number—finding that number?

Would they be better off today competing with this couple, perhaps?

HARWOOD: Well...

(CROSSTALK)

MATTHEWS: Or would there even be this couple?

BROWNSTEIN: There may not be.

HARWOOD: To compete with this couple, but a lot of Democratic strategists think they would be better off. But the Obama campaign’s view was, yes, she’s going to gain you some votes, but she may lose you some.

I want to mention other thing, Chris, about the couple—the John McCain contain and Sarah Palin couple that we can’t forget to mention. And that is, they’re two white candidates. We have got an African-American candidate leading the Democrat ticket.

MATTHEWS: Yes, I know.

HARWOOD: And that is something that is difficult for some voters to swallow.

MATTHEWS: Now, I do think—and especially older voters. And some people are tribal. Let’s be honest about it. They just vote ethnic. They vote racial. I think it’s a—a declining minority of the country. Maybe, in 20 or 30 years, it will be almost insignificant. But it’s obviously still there.

Let’s take a look at this latest Obama—this is the first time he’s done an ad since the Republican Convention that ignores Governor Palin.

(LAUGHTER)

MATTHEWS: They’re trying to get beyond—they’re trying to be post-Palin here.

Here they are.

(BEGIN VIDEO CLIP, OBAMA CAMPAIGN AD)

NARRATOR: When they grow up, will the economy be strong enough? Barack Obama understands what it takes: Make America number one in education again.

John McCain doesn’t understand. John McCain voted to cut education funding, against accountability standards. He even proposed abolishing the Department of Education. And John McCain’s economic plan gives $200 billion more to special interests, while taking money away from public schools. We can’t afford more of the same.

And Here’s the big question. Can you win back these women with kind of individual issues, or—when Republicans are making a cultural identification argument? That has been tough for Democrats. Married women in the last couple elections, married white women, especially those without college degrees, the Wal-Mart moms, have been voting very strongly Republican.

Here is the beginning—you can see the same kind of ad on different economic issues, on health care, but the issue is, can you ultimately overcome the cultural identification with economic arguments? That is the big Democratic bet.

(CROSSTALK)

BROWNSTEIN: That is the big Democratic bet. And Republicans have now put money on the other side of the table here.

MATTHEWS: John, the way—if I were writing Democratic speeches right now, I would talk to an audience.

I would say, OK, Mr. and Mrs. 65-year-old, stop thinking your age. Think about what your kids need for the next 30, 40 years. You may not be around much at that time. But they’re going to need education. They’re going to need infrastructure. They’re going to need energy. They’re going to need transportation systems that are energy-efficient.

They’re going to have to be able—you have to be able to compete with those countries out there, like China and India and Russia, that are fighting like hell to beat us right now. Think what they will need. Think like them. Don’t think ethnically. Don’t think like your grandparents, who would never even consider voting for Barack Obama. Think like your grandkids.

That, to me, is the—and that’s what I think that commercial we just saw then, it’s about thinking like kids. They don’t think whether their teacher is black or white.

HARWOOD: No question.

MATTHEWS: What do you think?

HARWOOD: Well, look, Barack Obama, in a political sense, has to try to build that bridge to the future that Bill Clinton used to talk about in 1996.

MATTHEWS: Yes.

HARWOOD: I think the other thing for Barack Obama is, he’s got a calculation to make about how much time he spends talking about Sarah Palin and how much time he spends focusing on John McCain.

MATTHEWS: Right.

HARWOOD: The initial calculation was, no, he’s only going to focus on the top of the ticket. But they look at some of the aspects of Palin, the issue, prepared to be president, some of the fragility of some of these claims about she stopped the bridge to nowhere when she was for it before, and think, they can’t pass up that target.

But the risk there is that you spend too much time having your nominee focus on the second spot on the other ticket.

MATTHEWS: That ad we just saw, the kids in the classroom, is the first evidence they have said, we have done enough knocking of her about not being straight about the bridge to nowhere. We’re moving on.

BROWNSTEIN: Can I just...

(CROSSTALK)

MATTHEWS: Yes.

BROWNSTEIN: ... point real quick?

Mark Warner made that case in his keynote speech. He said, look, the issue here should be which one of these candidate is better prepared to take this country into the future.

MATTHEWS: Yes.

BROWNSTEIN: But he was basically alone. Bill Clinton touched on that a little bit as well at the convention. Mostly, the Democratic argument wasn’t—it was not future/past. It was, who’s on your side? And future/past may be a better fit for Obama.

MATTHEWS: For my vote, I say, Democrats, think about the future if you’re going to win this thing. Otherwise, think about the past and enjoy losing.

Anyway, thank you Ron Brownstein.

Thank you, John Harwood.

Coming up—by the way, advice is free here—Obama vs. McCain. Who has the vision to lead this country into the future? My very question. We’re going to look at the 21st century issues that will decide—let’s talk to some real elected political figures here, two really visionary people, perhaps. We will have them on, Democrat and Republican, to see what their view of the—their candidates are about how the future is going to be under them if they win.

You’re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Still ahead on HARDBALL: More than a week after she was picked to be John McCain’s running mate, what more do we no know about Alaska Governor Sarah Palin? And can she maintain her popularity through the rest of this campaign?

That’s coming up later—when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

So, who’s thinking more about the future of our country and the future of our economy?

And Florida Congresswoman Debbie Wasserman Schultz is an Obama supporter.

Mr. King, Congressman King, give me a sort of half-a-minute—or a minute, if you will, about—give me a picture of John McCain’s future. Think about your grandkids, your kids, the world they’re going to live in, how he’s going to do the things that make their life better off because they will be more competitive and they will have jobs.

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE RANKING MEMBER:

Well, first of all, he will keep us safe from Islamic terrorism. He realizes the threat we face from Islamic terrorism.

Secondly, he realizes we cannot retreat within our borders when it comes to international trade. We have to have markets overseas. We have to have exchange of goods with overseas countries. And that establishes relations between us and them.

As far as education here in this country, he realizes you have to have more competition. We have to have more choice. As far as the economy itself, he realizes we can’t fall into the trap of class warfare. We can’t be raising taxes on one group of people, as opposed to the other. We have to keep the traditions of John Kennedy, that a rising tide lifts all ships.

So, I say, economically, education-wise, militarily, and trade-wise, and also energy—obviously, we have to explore all forms of energy, and we can’t be ruling things out, such as offshore drilling, or nuclear plants, because it offends George Soros or MoveOn.org.

MATTHEWS: OK.

Security against terrorism, low taxes, free trade, that’s among the issues, and good education.

What is it, Congresswoman Wasserman Schultz? Give me a quickie on what Barack would do for the future? I’m talking 20, 30 years from now. How is it going to be different because of him if he gets in?

going to do is constantly push the “scare me” button, which is what the Republicans consistently do, as evidenced by my good colleague’s comments here.

A Barack Obama presidency will give us universal access to health care for the 47 million Americans that don’t have it. He’ll turn the economy around and make sure that we can focus on the needs of working families, understand and give a tax cut to 95 percent of working Americans in this country.

He’ll make sure that we get rid of this “drill first” energy policy that the Republicans keep pushing and focus on investing in alternative energy resources, so we can really wean ourselves off of oil and not just talk about it. There’s a much longer list. But as a mom, I want Barack Obama to be president of the United States.

MATTHEWS: Good start. Here’s go to—here’s Senator Joe Biden, the running mate, talking about McCain and the issue of the economy in Missouri today.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL NOMINEE: I could walk

from here to Springfield, I doubt I’d find anybody who’d say we’re making great progress economically, unless I accidentally bumped into John McCain on the road.

MATTHEWS: John McCain thinks the economy’s doing well. Is that his position?

KING: No. What John McCain has said us that the economy is fundamentally sound. And the reason I would agree with that is, yes, there’s severe housing problems, yes, there is a real energy crisis, but in spite of that, our economy shows how resilient it is and the basic strength is there.

A lot has to be done to make sure that those who have been hurt will be helped, but the fact is, this administration inherited an economy that was in decline, the third quarter of 2000, first quarter of 2001. Then we had September 11. We’ve had the war against terrorism. And yet we had four years of uninterrupted growth because of tax cuts.

What you’re facing now is an energy crisis partly brought on because the Democrats won’t allow us to drill.

SCHULTZ: Oh, my gosh.

KING: That’s number one. And then also housing, which is a real issue and is being addressed.

SCHULTZ: You know, it’s just unbelievable that, Peter, you would say that John McCain acknowledges that there’s a problem with the economy. He actually said that Americans are better off. And you know, it’s not that he doesn’t care, it’s that he just doesn’t get it. He doesn’t support universal health care. He doesn’t support a comprehensive energy plan. He doesn’t support turning this economy around. And he clearly does not recognize the crisis of epic proportions that we have in our housing market, where we have 11 percent of Americans who are home owners facing foreclosure.

There is an economic crisis for working families, and all John McCain is going to offer us is more tax cuts for the wealthiest few and more scare tactics that, you know, we have terrorists on our borders. We need to focus on homeland security here at home and shore up our borders and develop a comprehensive immigration reform program, which John McCain once supported until it was politically inconvenient not to support it anymore, just like his choice of Sarah Palin.

SCHULTZ: He is all about compromise, all about getting himself elected first, and to heck with Americans and the needs that they have.

MATTHEWS: Well, here he is. Let him speak for himself, Congresswoman. Then you respond, Mr. King. Here is John McCain today.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: I’ll keep taxes low

and cut them where I can. Senator Obama will raise them. I’ll open new markets to our goods and services. Senator Obama will close them. I will cut government spending and eliminate earmark spending, and he will increase it.

My friends, my tax cuts will create jobs. His tax increases will eliminate them. My health care plan will make it easier for more Americans to find and keep good health care insurance. His plan will force small businesses to cut jobs, reduce wages, and force families into a government-run health care system where a bureaucrat stands between you and your doctor. We cannot have that.

(END VIDEO CLIP)

MATTHEWS: What does that mean, a bureaucrat stands between you and your doctor, Congressman King?

KING: Well, it means government (INAUDIBLE) let me just say, Debbie and the Democrats are resorting to personal attacks here, to say that John McCain doesn’t care about health care, that John McCain doesn’t care about the economy. I have not said one word questioning Obama’s integrity or his desire. I just think his ideas are wrong. John McCain is a man of the highest integrity.

Now, as far as the economy and as far as health care, what John McCain is saying is that with the economy, Barack Obama would raise taxes on 100 million Americans who own stock. They would have their taxes raised. That’s 100 million Americans. There are a lot of workers in that...

Anyway, up next, the HARDBALL “Sideshow” and revealing and potentially embarrassing tidbit. Its’ not that bad, but it’s kind of funny, about John -- wait’ll you hear him bragging (ph) to his kids. This is what I do at home with my kids, when we had them at home, brag about how wild I was. This is courtesy of his own daughter, Meghan. Wait until you hear what she says about her dad.

You’re watching HARDBALL here on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Time now for the HARDBALL “Sideshow.” Meghan McCain unfiltered. This morning on the “Today” show, John McCain’s daughter made a point of portraying him as an everyman. Well, she may have gone a bit too far with this tidbit.

(BEGIN VIDEO CLIP)

MEGHAN MCCAIN, JOHN MCCAIN’S DAUGHTER: One of my favorite things

about my dad is that he wasn’t running for president since high school. You know, he was not a good student, you know, notoriously rebellious, drove fast cars, dated a stripper. Like, I think it’s hilarious.

MATTHEWS: He dated a stripper? Talk about a claim to fame. But it does sound like a story that a dad would tell his kids to let them in on how wild things were when he was one of their—one at their age.

Anyway, next, cashing in on Sarah Palin. In less than two weeks, the Alaska governor has gone from relative unknown to ‘08 running mate to, get this, action hero doll. That’s right, the enterprising folks over at Herobuilders.com have elevated Palin to superhero status by hawking this $28 executive doll you see there. I have no idea what this is all about. Could it be about a woman of action, you know, getting things done?

Now for tonight’s “Big Number.” Today’s “Wall Street Journal” reports there’s significant evidence that Governor Palin once did back spending taxpayer money for the Alaskan boondoggle known as “the bridge to nowhere” -- you know, that $400 million bridge that hardly was justified by any reason. Yet here’s Sarah Palin out on the campaign trail, claiming again and again that she opposed that infamous “bridge to nowhere” up in Alaska.

thanks but no thanks for that bridge to nowhere up in Alaska. If our state wanted a bridge, we were going to build it ourselves.

(END VIDEO CLIP)

MATTHEWS: Wow. Is she imitating the action hero doll there? Anyway, there she goes again. Palin’s touted her not exactly true claim of opposing the bridge to nowhere at least seven times since being picked as McCain’s running mate, pretty much every time she’s spoken about her experience as governor, in fact, exactly the same words every time. Seven times she said she fought against what the record shows in “The Wall Street Journal” she initially supported. Tonight’s “Big Number.”

Up next, we now—so now Sarah Palin—we know she supported the bridge to nowhere when she campaigned for governor. Now “The Washington Post” reporters she’s been charging he state of Alaska a per diem allowance when she’s been staying at home in Juneau, Alaska, the capital. As we learn more about John McCain’s running mate, will she remain as popular as she seems to be right now? More on that when we return.

You’re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS: Welcome back. Sarah Palin continues to be the big personality dominating this presidential campaign. HARDBALL correspondent David Shuster joins us live from Washington with more.

DAVID SHUSTER, HARDBALL CORRESPONDENT: Well, Chris, all of the polling so far indicates that Sarah Palin has been a huge boon to the McCain campaign, and the attention on Sarah Palin is not about to ease up, in part because of the controversy over her record and the controversy over what she is saying about that record. Twice today at two different events, Palin again portrayed herself as a reformer and she said she opposed the biggest symbol of pork barrel spending. Watch.

(BEGIN VIDEO CLIP)

PALIN: I told Congress thanks but no thanks for that bridge to nowhere up in Alaska. If our state wanted a bridge, we were going to build it ourselves.

(END VIDEO CLIP)

SHUSTER: Again, she said that twice today. The problem is that every major news organization that has looked at this has reported that, in fact, Palin’s claim is false. For example, here’s exactly what “The Wall Street Journal” said today. Quote, “She endorsed the multi-million-dollar project during her gubernatorial race in 2006. And while she did take part in stopping the project after it became a national scandal, she did not return the federal money, she just allocated it elsewhere.” How much money? About $300 million that Palin kept in Alaska.

And speaking of money, today “The Washington Post” reported that in Palin’s first 19 months in office, she billed taxpayers in Alaska for 312 nights she spent in her own home. According to the story, Palin charged the state a per diem allowance that was intended to cover meals and incidental expenses while traveling on state business. A spokesman for the governor’s office says that such charges are not unusual, but spokesmen for other gubernatorial offices say it is.

Again, combined with the ongoing ethics probe into whether Palin abused her office in the firing of the person in charge of the state trooper, the danger in all of this for the McCain campaign is that Sarah Palin could get tagged by voters as just another politician, as opposed to the maverick that Sarah Palin and John McCain are trying to introduce to voters.

In the meantime, Barack Obama was asked about Sarah Palin today, and he acknowledged that so far, she has helped the McCain ticket.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: There is no doubt

that Governor Palin attracted a lot of attention this week. She’s been on the minds of all of you, and as a consequence, has been before the American people constantly for the last week and has brought excitement to the Republican Party. There’s no doubt about that. I think that what we’re going to have to do is to see how things settle out over the next few weeks, when people start examining who’s actually going to deliver on the issues that people care about.

SHUSTER: Sarah Palin has one more event, and that’s in Virginia, before she will head back to Alaska tomorrow. And then she has invited ABC News, Chris, to sort of follow her around for two days for an interview that could air as early as Friday—Chris.

MATTHEWS: It’s always great to break those stories. And James Grimaldi just returned from Alaska and has a story about Palin in today’s “Washington Post.”

James, tell me—get me straight on this because I think I got it wrong in the last segment. She charged the state a per diem, per day, expenses for, like, meals and travel while she was what, living at home in Wasilla? Is that’s right? Is that it?

JAMES GRIMALDI, “WASHINGTON POST”: Yes, that’s exactly right. Now, her duty station would be in the state capital of Juneau, and so technically, when she went to Wasilla, she was, you know, on travel. But the fact is, she was commuting 45 miles to the south to work in the governor’s Anchorage office at the time she was accepting this approximately $60-a-night per diem. And essentially—I don’t know about you, but I don’t get a per diem to stay in my own home.

MATTHEWS: Well, could she say—just to give her side, could she be taking that money to pay for gas?

GRIMALD: I don’t know about you, Chris, but I also don’t get mileage for driving to work.

MATTHEWS: Let me ask you, do you think you have pay dirt here? In other words, is this a game-changer? Would a person be expected to vote or not vote for Governor Palin based upon the importance of this report that she was grabbing per diem money on a somewhat flimsy notion that she’s busy even at home?

GRIMALD: No. She’s technically certain on the money in terms of what she filed. And, therefore, I think this could be a chink in the armor of Joan of Ark. But it certainly is not going to diminish her in the view at all of her supporters. I mean, right now she looks like a freight train.

MATTHEWS: What about the 43,000 dollars you point out that she got for travel? Is that legitimate? We’re really going through her pocketbook here for money, paper, the chits are all right and the receipts are all there. I guess that’s what we do here, sort of a late vetting. Is that fair and square, that she receiving 43,490 to travel from the state?

GRIMALD: Well, there are two standards. There’s Sarah Palin standard and then there’s her predecessor. Sarah Palin has held herself beyond reproach, you know, Caesar’s wife sort of thing. So to the extent that she’s flying around—I could tell you, I heard from people in the state who were very surprised to see these numbers, 10,000 for her daughter Piper, who’s seven, to fly back and forth, thought it was a lot more and that she was smarter than that, especially since she’s campaigning on this above the fray type of a campaign.

But look at who she’s comparing herself to, Chris. Her predecessor was Frank Murkowski. Frank Murkowski had a much steeper and higher bill when it came to travel. I mean, Frank Murkowski’s wife in 2006 spent much more than Todd, the husband and the three daughters did, in the 19 months that she’s been in office. So compared to Frank Murkowski, she still comes out with a much lower expenditure. But in terms of whether or not it meets the smell test, people who are looking for something to call her on probably have reason to ask questions, if it really is legitimate to charge a per diem when you’re staying in your own house.

MATTHEWS: OK, let me ask you about some other things. You know, this whole thing about whether there’s an—there is an ethics investigation going on about her. It cost about 100,000 dollars. It’s about whether she was right in firing a commissioner, safety commissioner, because he wouldn’t fire her had ex-brother-in-law, who she apparently did or did not want fired. What’s the crime there or the ethics problem there?

ZUCKMAN: Well, the question is whether she pressured this person—pressured the police commissioner to fire the ex-brother-in-law, which gets into all sorts of conflict of interest things. But it’s hard to see regular people getting too upset with her when they find out that the ex-brother-in-law, the state trooper, tasered her nephew.

MATTHEWS: You know the guy is a bad guy. She’s governor of the state, and she didn’t tell the public safety commissioner about this person’s manner of being or behavior in private life, wouldn’t she be deficient in her responsibility?

ZUCKMAN: You’ve got to think so, if he would do that to his own --

MATTHEWS: Could you imagine if this guy was offered something ghastly while in the line of duty, and the governor said, well, I wanted to keep it a family matter. Then she’d be in trouble for that.

ZUCKMAN: I think it’s probably to her benefit they’ve expedited that investigation so they can get it wrapped up and put to bed.

MATTHEWS: What do we make of this, James? I don’t want too be an elitist, because not everybody has the money to travel or the opportunity to travel. But the fact she’s governor of a state. She’s really only been overseas once. Is that an issue of any significance to the fact that she may well be seeing a lot of the world in about three or four months if she’s VP?

GRIMALD: I’m sure it will be brought up as an issue. She did go overseas. But she met with John McCain, according to travel records, I think in Alaska in March, if the records are to be believed. She talked to General Petraeus as well during the course of the year. She looks like she was being looked at, and has been thinking about these issues for some time. I have a feeling she might be better prepared.

But I want to go back to the Trooper-gate issue, because I actually think you’re missing a point here. These allegations against that trooper all were known well and before the trooper divorced the governor’s sister. In fact, they weren’t investigated and brought up until after the fact. Before she became governor, it had already been adjudicated. The guy had been disciplined for five days.

Then she goes into the governor’s office after the case is closed, asked her commissioner to look at it. He says sure, I’ll take a look at it. He looks at it and says, we’ve investigated it. He’s been disciplined. There’s nothing else we can do. Yet, she continued to harp on it, along with having three cabinet members—well, we’re not sure why they called. But three cabinet members actually gave this commissioner a call and she sent two e-mails that really castigated this guy.

Was he a model trooper? No, he wasn’t a boy scout. On the other hand, the case was closed, and the family seemed to be very obsessed by this case after the fact. That might be a technical violation of Alaska law. It may not become a campaign issue in the national scope, because of the reasons that both you and Jill just said.

MATTHEWS: Great, thank you very much, Jill Zuckman. Thanks for joining—if you have any new stuff, James, let us know. People want to know who we’re electing.

Up next, the politics fix and much more on the Palin affect, it’s called. What Alaskans are saying about her and what the Obama campaign has in store to lessen the excitement surrounding her. It’s all interesting. This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We’re back. It’s time now for the politics fix. Joining me are the “Washington Post’s” Perry Bacon and “The New Yorker Magazine’s” Ryan Lizza. Let’s take a look at this latest Obama comment about a very impressive Republican candidate for vice president.

OBAMA: There is no doubt that the Republicans are excited, particularly the right wing of the Republican party is excited, by Governor Palin’s choice. I think that has less to do with gender than it has to do with her ideological predispositions, which are closely aligned to theirs.

(END VIDEO CLIP)

MATTHEWS: Is that a little too Stevensonian, that response?

RYAN LIZZA, “THE NEW YORKER”: The old criticism of Obama that is coming back a little bit is he’s not being quite tough enough. He’s had some tough days. I don’t think they’ve decided yet on a line of attack against her. They’re going in two different directions. They started with the experience direction. That was the first statement they put out when she got picked.

Now they’re saying, let’s define her as a right winger. We’ll talk about her views on creationism and some of these other—

MATTHEWS: She has a lot of views that are pretty far over for a person that seems very likable and mellow. She doesn’t look like a political zealot.

LIZZA: Look, you have to understand, she came out of a Christian right movement in Alaska. Her first race as mayor, the big story of that race was she brought all these cultures war issues into this small town Wasilla, where mayoral campaigns had previously been decided on whether to put a sewage treatment in town or not. She made the campaigns about these abortion and gay marriage. So she does have that background.

MATTHEWS: Let me go to Perry this. Perry, I guess the big question if you’re on the other side, if you’re Barack Obama, do you try to ignore her and focus on John McCain, your real opposite number? Or do you figure, if I don’t stop her early, she’ll take off and be almost seen as perfect? Because if you don’t put some marks on her, she is seen as perfect.

PERRY BACON, “THE WASHINGTON POST”: Chris, I think you’ve seen them

shift over the last week. When they started off, they sort of—Biden and Obama on the campaign trail tried to ignore her and take every question and turn it into a John McCain question. You can see the last couple days, they really have started focusing on her more. I think the poll numbers show enthusiasm for McCain is coming from her. They need to define her in a more central way, define her as too conservative, define her negatively. They figured out, they can’t ignore her. She is the person driving the campaign dialogue. You have to talk about her.

LIZZA: There is a certain teflon quality to this woman, right? She is someone—you have to respect how fast she got in Alaska politics in a very short amount of time. It’s not unlike a certain senator from Illinois.

LIZZA: She’s joyous. She looks good. She is an incredible communicator. And her whole history in Alaska was that she was underestimated. She was underestimated when she ran for mayor. She was underestimated when she ran in the primary for governor and when she ran in the general election. She won all those races. So they have to be—they haven’t settled—like Perry said, they haven’t settled on what the consultants call a frame on this woman yet. Do they go with the inexperience frame? Do they go with the right winger frame? I think they’re sort of testing both of those right now.

MATTHEWS: You know, Perry, this candidate for vice president could end up in the White House. She could end up president some day. Is there way that the Democrats can make that the point, that she may not be, well, a reasonable candidate for that high office at this point in her career?

BACON: I suspect they won’t. Like Ryan said, they switched from talking about inexperience to talking about her views, as they focus on—

I think Biden talked about her opposing to stem cell research today. I think any time they focus on experience, that gets into a debate about does Barack Obama have the experience to be president, too. I think that’s something they want to try to avoid as much as possible. I think that’s why you won’t see that experience tack. I think you’ll see surrogates talk about that. I think Tom Daschle brought it up. I’m not sure you’re going to hear Obama himself bring that issue up as much.

MATTHEWS: Twenty five percent of the voters who are voting for Obama are pro-life. About the same number who are voting for McCain are pro-choice. So not everybody makes up their mind on these hard-nosed social issues, even as hot as abortion rights. She could be getting a lot of votes from what we call PUMAS, angry women who were for Hillary Clinton and don’t like the way she was treated, even though they disagree with her on the issues.

LIZZA: Right, there are people who have views on abortion but they don’t vote on the abortion issue, right. Can I just say one thing on what you just asked Perry about? To me, this is the elephant in the room about Sarah Palin. I think there is a little reluctance from folks in the press to just say what is on everyone’s mind. That is do people feel comfortable with this woman serving as president at a time when we’re at war in two countries, when she’s been mayor of Alaska, one of the smallest state in America by population?

MATTHEWS: Has made one trip overseas in her life.

LIZZA: I think a lot of the press corps is a little bit reluctant to go there and to be honest about that, because, frankly, the McCain campaign has been very good at pushing back and working the refs on this issue.

MATTHEWS: I agree. By the way, when you have to count a country where you stop for refueling as one of the countries you visited, when all you did was sit on the plane while it got some gas in the airport, that means you’re really pushing your list a little hard.

BACON: You have to argue that you have a foreign policy with Russia or the commander in chief of the National Guard.

MATTHEWS: Likability carries a heavy weight in this country. We are a popular country. We like people we like. And it carries a lot of weight. It really is interesting. How do you separate the likability from the question of knowing what you’re talking about? We’ll be right back with the round table for more of the politics fix. By the way, being able to talk about something you haven’t heard about before is called intelligence. You can’t always measure intelligence by experience. You’re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We’re back with the round table and only a few seconds. I was looking at some old numbers. In fact, some intern here dug it up for me, which is that back in 1950, that great debate between Kennedy and Nixon, 67 million people watched out of a population of 171. For the same proportion of people to show up this year, this 26th of September, by the way, the same date for first date, 114 million people out of 305 will have to watch it. Do you think we’ll get that many to watch?

LIZZA: It seems unlikely, considering the number for the convention which were big but not close to that. It was about 40 million on each. There’s intense interest in this electric.

(CROSS TALK)

MATTHEWS: Give me a hunch. give Me a ballpark.

BACON: Fifty million, I’m sure, not anything like that 100.

MATTHEWS: I say 80 million. Anyway, Perry Bacon, thank you, Ryan Lizza. We only have a little time. Join us again in one hour at 7:00 Eastern, when we release the results, the full results of the new NBC/”Wall Street Journal” poll. Right now, it’s time for RACE FOR THE WHITE HOUSE with David Gregory.

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